Following the decision to stop taking business from US customers, the Board of the AIM-listed firm agreed that the optimal course of action was to dispose of its gaming operations and infrastructure.
The Spin Palace Group is being sold back to its original vendor, Seahouses Holdings Limited, for a total consideration of £11.1m, including a cash payment of £5.0m and the reclassification and cancellation of Seahouses\’ shares and warrants in Fairground Gaming.
Subsequent to the disposal, Fairground will be left with £6.1m in cash, which will be distributed to shareholders at the end of February 2007. Commenting on developments, Evan Hoff, CEO of Fairground Gaming, said: “The closure of our US-facing activity and the impact of that legislation on the listed company environment continues to be deeply felt, with our business now only marginally profitable. Accordingly, in the interests of maximising value for our shareholders, we believe it is in the best interests of all our shareholders to accept this offer for The Spin Palace Group and for the Company to proceed along the lines announced today.”
Elsewhere, GameAccount, the world’s largest provider of P2P skill games, announced the closure of US-facing skill gaming. Kevin Dale, CEO of GameAccount, commented: “Skill-based online gaming is and will remain a grey area under the UIGEA until tested under federal US law. It is extremely hard to argue that games of skill, such as those provided by leading skill games operators, have zero element of chance influencing the outcome of real money tournaments. Closing access to US-resident real money players was a hard decision, but a sensible one.”
Media Corporation, owner of Gambling.com, said the new US legislation will result in a 20% to 30% reduction in gaming related search marketing revenues, representing an annual reduction to group operating profits of approximately £0.5 million to £0.9 million. The marketing company also confirmed that it is having ongoing discussions in relation to the sale of its online and mobile gaming business, incorporating the Casino.co.uk brand.
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